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New Hampshire to Reconsider Increasing its Gas Tax in January

New Hampshire will consider a Republican bill in 2014 to tie the gas tax to inflation, increasing it by about 4 cents next year should it pass. The Senate killed a House bill in May to increase the gas tax by 12 cents over 3 years.

"Sen. Jim Rausch, a Derry Republican and chairman of the Senate Transportation Committee, has a new proposal that would link future increases in the gas tax to the rate of inflation, starting with a roughly 4-cent hike in 2014," writes Ben Leubsdorf. The circumstances behind the May defeat were posted on May 29 with an unsuccessful attempt to increase the Iowa gas tax.

The 18-cent state gasoline excise tax or road toll, as it is called in N.H., unchanged for 22 years, falls on the low end [PDF] among state gas taxes.

While Senate President Chuck Morse, a Salem Republican, said he won't block Rausch’s bill from being introduced, he won't support it.

“I continue to oppose any increase in the gas tax; I believe it hurts the families of New Hampshire who can least afford it and it burdens our businesses trying to make ends meet in a fragile economy,” Morse said in a statement.

Had he wished, Morse could have prevented the bill from being heard because the May Senate vote meant that "the subject matter of the (gas tax) bill cannot be resurrected again in the current two-year session", with the subject matter determined "at the discretion of the Senate President," wroteJohn DisTaso of the Union Leader on May 23.

Unlike the House bill sponsored by Rep. David Campbell, D-Nashua, which died in the Senate due to bipartisan opposition, Rausch's bill does not explicitly raise the gas tax, but by linking it to the Consumer Price Index, there would be an immediate increase in the tax.

In 2014, the increase would reflect CPI change between 2003 and 2013, and going forward, the rate would be automatically adjusted every four years starting in 2018....Final CPI numbers aren’t yet available for 2013, but Rausch estimated the 2014 increase would come in at a little above 4 cents, and that future increases would be “a penny or less” based on the current inflation trend.

Watch for how the House votes on a bill to allow one casino. As we noted in May, Campbell stated that the Senate killed his bill as "retribution for the gambling vote", i.e. because the House defeated that bill.

Neighboring states Vermont and Massachusetts passed bills to increase their gas taxes in April and July, respectively.